Annuity type of calculation: invest $150,000 at 8% for 10 years

zzinfinity

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Nov 12, 2009
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Suppose I invest $150,000 today into an account that earns interest at 8%. After 10 years I begin withdrawing "x" dollars every month. What is the max value "x" can be if I want to continue making withdrawals for 50 years (so 60 total years after the account's inception)?

How would one approach this problem? Is the a name for this type of calc? Thanks in advance.
 
And, you can get better at writing geometric series.

150(1.08^10) = x(1 + v + v^2 + v^3 + ... + v^599 ), where v is the equivalent monthly discount factor.

Add it all up and solve.

A third approach would be to use a spreadsheet. They do this sort of thing in their sleep.
 
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